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A Synoptic View of Regional Growth and Unemployment: I - The Neoclassical Theory

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  • J.S.L. McCombie

    (Department of Economics, University of Melbourne, Victoria, Australia)

Abstract

This paper is the first part of a consideration of the implications of the current controversies in macroeconomics for regional growth theory. It is concerned with the neoclassical explanation of disparities in regional growth and unemployment rates. The one-sector and two-sector neoclassical models are surveyed and it is shown how this approach explains differences in productivity growth in terms of the progressive eradication of an initial misallocation of resources (both interregionally and intraregionally). Involuntary unemployment is ascribed to the classical view that real wages are too high. The effect of the spatial diffusion of innovations on productivity growth is also examined.

Suggested Citation

  • J.S.L. McCombie, 1988. "A Synoptic View of Regional Growth and Unemployment: I - The Neoclassical Theory," Urban Studies, Urban Studies Journal Limited, vol. 25(4), pages 267-281, August.
    • Handle: RePEc:sae:urbstu:v:25:y:1988:i:4:p:267-281
    DOI: 10.1080/00420988820080391
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    References listed on IDEAS

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    1. McCombie, John S L, 1980. "On the Quantitative Importance of Kaldor's Laws," Bulletin of Economic Research, Wiley Blackwell, vol. 32(2), pages 102-112, November.
    2. Carlberg, Michael, 1981. "A neoclassical model of interregional economic growth," Regional Science and Urban Economics, Elsevier, vol. 11(2), pages 191-203, May.
    3. J.S.L. McCombie, 1982. "How Important is the Spatial Diffusion of Innovations in Explaining Regional Growth Rate Disparities?," Urban Studies, Urban Studies Journal Limited, vol. 19(4), pages 377-382, November.
    4. Richard A. Brecher, 1974. "Minimum Wage Rates and the Pure Theory of International Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(1), pages 98-116.
    5. J.S.L. McCombie, 1988. "A Synoptic View of Regional Growth and Unemployment: II —The Post-Keynesian Theory," Urban Studies, Urban Studies Journal Limited, vol. 25(5), pages 399-417, October.
    6. Neary, J Peter, 1978. "Short-Run Capital Specificity and the Pure Theory of International Trade," Economic Journal, Royal Economic Society, vol. 88(351), pages 488-510, September.
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    Cited by:

    1. Calvin Jones, 2010. "Less and Less Favoured? Britain's Regions in the Energy Crunch," Environment and Planning A, , vol. 42(12), pages 3006-3022, December.
    2. David Gray, 2005. "An examination of regional interaction and super-regions in Britain: An error correction model approach," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 619-632.
    3. Christine Carton Madura, 2009. "Mecanismos kaldorianos del crecimiento regional: Aplicación empírica al caso del ALADI (1980-2007)," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 8, pages 1-24, May.
    4. J.S.L. McCombie, 1988. "A Synoptic View of Regional Growth and Unemployment: II —The Post-Keynesian Theory," Urban Studies, Urban Studies Journal Limited, vol. 25(5), pages 399-417, October.
    5. Mäki-Arvela, Petteri, 2002. "Testing the Neoclassical Model of Regional Economic Growth: A Panel Data Approach across the Finnish Provinces, 1973-1996," The Review of Regional Studies, Southern Regional Science Association, vol. 32(2), pages 223-253, Summer/Fa.
    6. Elias G. Carayannis & Rajiv Mallick, 1996. "Regional Income Disparities In Canada: Implications For Theories Of Regional Convergence," The Review of Regional Studies, Southern Regional Science Association, vol. 26(1), pages 55-74, Summer.
    7. Edward Feser & Stuart Sweeney, 2003. "Out-Migration, Depopulation, And The Geography Of U.S. Economic Distress," International Regional Science Review, , vol. 26(1), pages 38-67, January.
    8. Richard Harris, 2011. "Models Of Regional Growth: Past, Present And Future," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 913-951, December.
    9. David Gray, 2019. "Medium-term cycles and housing: Is regional integration different?," Urban Studies, Urban Studies Journal Limited, vol. 56(9), pages 1786-1800, July.
    10. Ying Liu & Lin Li & Fei Teng Zheng, 2019. "Regional Synergy and Economic Growth: Evidence from Total Effect and Regional Effect in China," International Regional Science Review, , vol. 42(5-6), pages 431-458, September.
    11. Millemaci, Emanuele & Ofria, Ferdinando, 2016. "Supply and demand-side determinants of productivity growth in Italian regions," Structural Change and Economic Dynamics, Elsevier, vol. 37(C), pages 138-146.
    12. Jun Koo & Somik Lall, 2007. "New Economic Geography: Real or Hype?," International Regional Science Review, , vol. 30(1), pages 3-19, January.
    13. Abdul-Gafaru Abdulai, 2014. "Rethinking spatial inequalities in development: the primacy of politics and power relations," Global Development Institute Working Paper Series esid-029-14, GDI, The University of Manchester.
    14. John Glasson, 1992. "The Fall and Rise of Regional Planning in the Economically Advanced Nations," Urban Studies, Urban Studies Journal Limited, vol. 29(3-4), pages 505-531, May.
    15. Fiorillo, Fabio, 2001. "Rate of growth and sector specialisation coevolution in a Kaldorian export-led growth model," Structural Change and Economic Dynamics, Elsevier, vol. 12(1), pages 91-114, March.
    16. David Gray, 2021. "A simple measure of beta-convergence revisited," Urban Studies, Urban Studies Journal Limited, vol. 58(12), pages 2569-2583, September.
    17. Shishir Shakya & Alicia Plemmons & Juan Tomas Sayago-Gomez, 2022. "Spatial spillovers and the productivity-compensation gap in the United States," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(3), pages 669-689, June.

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